DHUnplugged Podcast Horowitz and Dvorak

Risk - happens fast!

Costco Selling ALOT of Gold

April 15th - Tax payment withdrawals

Rates spike, oil moves lower

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Warm Up
- Risk Happens FAST
- Costco Selling ALOT of Gold
- April 15th - Tax payment withdrawals
- Fewer students attending 2 0r 4-year college

Market Update
- Banks reporting - mixed results
- Rates UP!
- Earnings Season
- Risk off - Missiles Flying
--- WAR escalations concerning investors

Rates
- Rates spiked with all of the recent concern that the Fed will not be cutting rates so fast
- Came on on the Iran retaliation worries
- Spike Monday to 4.64% for the 10Yr - starting to get worrisome that could be technical move and disrupt markets

Rates in Europe
- European Central Bank President Christine Lagarde on Tuesday said the central bank remains on course to cut interest rates in the near term, subject to any major shocks.
- "We just need to build a bit more confidence in this disinflationary process but if it moves according to our expectations, if we don't have a major shock in development, we are heading towards a moment where we have to moderate the restrictive monetary policy," Lagarde said.
--- Also noted that she is very attentive to the price of oil

HA! If you don't like the numbers...
- The Bank of England on Friday announced a “once in a generation” overhaul of its inflation forecasting following a long-awaited review by former Federal Reserve Chair Ben Bernanke.
- The review was initiated in response to criticism over shortcomings in the bank’s recent policymaking.
- It sets out 12 recommendations — including scrapping the bank’s “fan chart” forecasting system — which BOE Governor Andrew Bailey said the bank was committed to implementing.

Inflation Spots
Sticker Shock
And then at 1:30PM Tuesday
- Fed Chairman Jerome Powell at Canadian forum says recent data shows lack of progress on returning to 2% inflation goal; says US economic performance has been quite strong.
- Markets were not pleased -
---- Begs the question: - what is the point of this at a time with such global stress having these types of comments?
---- WSJ's Nick Timiraos says Fed Chairman Jerome Powell "dialed back" rate reduction expectations at Canadian forum amid new inflation uncertainty

Safe-haven?
- Bitcoin and other cryptos PLUNGE when Iran sent misses and drones
- How is that digital gold or store of value?
- Simply trades like a speculative risk asset and starting to hear that phrase quite a lot.
- Tried to rally on Sunday when Iran said that is all they are doing- but sold off again Monday

Earnings This Week
-  Plenty of banks and financials (BAC, GS etc) also Netflix Thursday after the close
- Proctor and Gamble on Friday
- Problem is that they come right as risk elevated.

Goldman Sachs Earnings
- Goldman Sachs on Monday posted first-quarter profit and revenue that topped analysts’ expectations, fueled by a surge in trading and investment banking revenue.
- The bank said profit jumped 28% to $4.13 billion, or $11.58 per share, from the year earlier period, thanks to a rebound in capital markets activities
- Goldman shares climbed more than 4% in the days trading Monday.

JPM Earnings
- The bank said first-quarter profit rose 6% to $13.42 billion, or $4.44 per share, from a year earlier, boosted by its takeover last year of First Republic during the regional banking crisis.
- But in guidance for 2024, the bank said it expected net interest income of around $90 billion, which is essentially unchanged from its previous forecast.
- That appeared to disappoint investors, some of whom expected JPMorgan to raise its guidance by $2 billion ...

A WINNER - CTP for Rumble

A new CTP to announce!

Club 72 Thank You

Solar Eclipse

PLUS we are now on Spotify and Amazon Music/Podcasts!





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DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.




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Follow Andrew Horowitz on Twitter
Warm Up
- A WINNER - CTP for Rumble
- A new CTP to announce!
- Club 72
- Solar Eclipse

Market Update
- Boeing issues continue
- Oil market on fire
- Yellen - talking tariffs again
- Kashkari and others on cuts
- Earnings season starts this week

Lucky CLUB 72
Jonathan Farris
Mark Studebaker
William Palmer
Susan Erickson
Terrence Cleary
Anonymous (2)

Fed Walking All Back
- Minneapolis Federal Reserve Bank President Neel Kashkari said on Thursday that at the U.S. central bank's meeting last month he penciled in two interest rate cuts this year but if inflation continues to stall, none may be required by year end.
- "If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all," Kashkari said during an interview with Pensions & Investments. "There's a lot of momentum in the economy right now."

Walking Forward
- Federal Reserve Governor Michelle Bowman said Friday that it's possible interest rates may have to move higher to control inflation, rather than the cuts her fellow officials have indicated are likely and that the market is expecting.
- "While it is not my baseline outlook, I continue to see the risk that at a future meeting we may need to increase the policy rate further should progress on inflation stall or even reverse,"

Who is the best?
-If you were wondering about the track record of the Fed Chair's performance over time, it's worth delving into the historical data.
- Overall, the track record of Fed Chairs over time reflects the challenges and complexities of managing monetary policy in a dynamic and ever-changing economic environment. Each Chair has faced unique circumstances and challenges during their tenure, and their actions have had far-reaching implications for financial markets and the economy as a whole.



 

Whispers
- Hearing that the car business - used and new having one of the worst years on record (from selective car salespeople)
- Same as above on lower end boat business (sales)
- U.S. small-business confidence slipped to the lowest level in more than 11 years in March amid rising concerns about inflation, according to a survey on Tuesday.
- The National Federation of Independent Business (NFIB) said its Small Business Optimism Index fell 0.9 point to 88.5 last month, the lowest level since December 2012. It was the 27th straight month the index was below the 50-year average of 98.
- - Twenty-five percent of owners reported inflation was their single most important problem in operating their business, reflecting higher input and labor costs, up 2 points from February. The share of businesses raising average selling prices rose 7 points from the prior month.

Inflation Data and ECO
- CPI and PPI this week
- CPI expectations are 0.4% MoM for March
--- Many are sahing that this is a clean month without odd seasonal factors - so something to watch
- - 10 Yr at 4.378%
----------- FOMC minutes at 2:00 Wednesday
-- Last week - Employment situation continues to be strong - 3.8% Unemployment rate 300k added to payrolls (Wage growth was okay)

Earnings Season - Banks in Focus
- Banks are expected to see some decline in earnings over the period
- Focus on net interest margin as well as credit deterioration (and days outstanding)
- However, YoY - earnings growth for some look pretty good
- - - - Property & Casualty Insurance (87%), Reinsurance (62%), Life & Health Insurance (12%), and Multi-line Insurance (12%).

REMOTE WORK on the sea

All of a sudden - mood swing

The bloom is off the Rate-Cut-Rose

Leaking Data - Another breach

More AI - lots of $$ committed to this...

PLUS we are now on Spotify and Amazon Music/Podcasts!





Click HERE for Show Notes and Links
DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.




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Follow Andrew Horowitz on Twitter
Warm Up
- All of a sudden - mood swing
- Bloom is off the Rate Cut Rose
- Leaking Data - Another breach
- More AI - lots of $$ committed to this...

Market Update
- Oil prices moving through key resistance
- Apple back to Oct 2023 support -watch out below?
- Gold/Silver Soaring - into higher rates and higher USD???
- Oil on the rise

CTP for Rumble Update
- Marcus G - In the top spot right now....
- - Thatch House dude

HCD: Donations - Need a new Shirt Prize and Design - Plus Contracted Devs prices inflation.

 Analyzing Apple's Chart
- Key levels of support
- Down-trend



Apple Chart




Powell on Good Friday
- PCE report (on day the markets are closed for Good Friday)
-- Showed 2.8% YoY and 0.3% MoM
- Powell tried to talk down market expectations for rate cuts like several other recent speakers
- - Market still hoping for MAYBE 3 - but it looks like June is off the table.

Stronger Economy than Thought
- ISM comes in above 50 for the first time in nearly 18 months
- Economic strength + good employment + Inflation = Rate CUT?????
- Market is finally getting the hint
--- 10-Yr rate spiked to 4.38% today
ISM Chart
Global Economic Trends
- China finally saw its manufacturing number gain some traction last month
--- China's manufacturing activity expanded at the fastest pace in 13 months in March, with business confidence hitting an 11-month high, driven by growing new orders from customers at home and abroad, a private survey showed on Monday.
- South Korea - Sticky inflation (Consumer prices advanced 3.1% in March from a year earlier)
USA Strong
Commodities on the rise
- Cocoa futures for May delivery were up 3.9% at $10,030 per metric ton, marking the first time the commodity breaks above the $10,000 mark. Cocoa has been on a tear this year, soaring nearly 39%.
- Ivory Coast, the biggest coca producer in the world, is facing hotter-than-normal temperatures — which have led to dryer-than-usual conditions and crop yields.

TSLA
- Q1 deliveries declined by 8.5% yr/yr to 433,000, representing TSLA's first yr/yr decline since the pandemic-impacted year of 2020. Importantly, that decrease is partly due to extraordinary events that were out of TSLA's control.
-- Berlin fire factory shutdown, Red Sea passage issues etch.
- Competition in China is really heating up and cost of EVs from many Chinese manufacturers are much lower.

M&A - Amazon
- Amazon.com Inc. says it’s investing an additional $2.75 billion into Anthropic, an artificial intelligence startup.
- The infusion brings Amazon’s total investment in the company, a well-regarded builder of so-called generative AI tools able to generate text and analysis, to $4 billion, following an earlier investment announced in September.
-  As part of that deal, Amazon had the right to contribute the additional funds in the form of a convertible note, provided it did so before the end of March.

AI NEWS
- Microsoft and OpenAI are in discussions regarding Stargate, a new AI super-computer data center project to be headquartered in the U.S. may cost over $115 billion and is planned for launch in 2028.
- $$$$$$115 BILLION
- That is like 115,000 $1,000,000 homes....
- Stargate’s power requirements, estimated to be several gigawatts (5) may require Microsoft and OpenAI to explore alternative power sources, like nuclear power. Enough to power 3,750,000 for a year!!!!!!!!!!!!!!!!!
----- Hoover Dam X2

Meanwhile
- Microsoft will sell its chat and video app Teams s...

Fed in Focus - FOMC Rate Decision Wednesday.

Reddit IPO Frenzy!

Inflation - definitely not going away.

Announcing - A New Closest to The Pin

PLUS we are now on Spotify and Amazon Music/Podcasts!





Click HERE for Show Notes and Links
DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.




Love the Show? Then how about a Donation?




Follow John C. Dvorak on Twitter
Follow Andrew Horowitz on Twitter
Warm Up
- A New CTP Announced
- No Show Next week - business meetings out of town
- A not so surprising result in the Russian Elections
- An important change to stock trade settlements is coming

Market Update
- Fed in Focus - FOMC Rate Decision Wednesday
- Reddit IPO Frenzy
- Inflation - definitely not going away
- AI Frenzy - Culd Call This DHAI Unplugged - so much AI news to discuss
- Yield Frenzy

PPI Release
- After  a HOT CPI, PPI Comes in Hotter
- 0.6% on the core - but only 1.6% YoY
- The Producer Price Index for final demand rose 0.6 percent in February.
- Prices for final demand goods advanced 1.2 percent, and the index for final demand services moved up 0.3 percent.
- Prices for final demand advanced 1.6 percent for the 12 months ended in February.
- Markets didn't know what to do with this on Friday.



PPI MoM




Company Stats - Recession?
- According to FactSet: During Dec-March earnings calls, 47 cited the term “recession” during their earnings calls for the fourth quarter.
-- This number is below the 5-year average of 85 and below the 10-year average of 61.
- This quarter will mark the lowest number of S&P 500 companies citing “recession” on earnings calls for a quarter since Q4 2021
Companies Citing Recession
% of Companies
Reddit
- IPO slated to be live sometime this week (March 21)
- 5X Oversubscribed
- Reddit began sending invitations to users to participate in the IPO based on one of two measurements of engagement on the site: either the number of actions they’ve taken as a moderator of a forum on the platform (also known as a “subreddit”) or their “karma” score, a figure that indicates a user’s contributions and reputation among other users on the site.
- Reddit plans to list 22 million shares at a price between $31 and $34, according to the latest version of the IPO prospectus it filed Monday with the Securities and Exchange Commission. The company stands to take in between $473.6 million and $519.4 million from the sale of roughly 15.3 million shares.
- Valuation > $6 billion
- Question???? Is Reddit profitable? NO -  However, the company has been substantially growing revenue in the past few years.
---- Reddit's total revenue in 2023 was $804 million, up 21% from $666 million in 2022.
----- Reddit's net loss for 2023 narrowed to $90.8 million.

Yields - 10 YR
- Highest level of 2024
- technically breaking out - if Fed moves a bot more hawkish - 4.50% is next test
Yields
Japan Yields
- The Bank of Japan is set to raise its key interest rate for the first time in 17 years on Tuesday following its two-day monetary policy meeting, Kyodo reported.
- The BOJ will raise the short-term rate to the 0%-0.1% range, the report said. The development reflects growing confidence among policymakers that a virtuous cycle of wage growth and price hikes is in motion following this year’s labor-management pay negotiations
- RAISING TO ZERO!

Global Rates - Who Will CUT First?
First Mover?
ELON
- Increasing prices on Model Y by $1,000
--- Stock moves up by 6%
- Goldman Downgrades - Perhaps this is why stock moved up - another bug downgrade - stock in the toilet - nowhere else to go
--- SpaceX is building a network of hundreds of spy satellites under a classified contract with a U.S. intelligence agency, five sources familiar with the program said, demonstrating deepening ties between billionaire entrepreneur Elon Musk's space company and national security agencies.

Elon - Ketamine

Volatility is back and Bitcoin mania is here again.

Need a new CTP Stock!

China stocks on a run...

PLUS we are now on Spotify and Amazon Music/Podcasts!





Click HERE for Show Notes and Links
DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar.




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Follow John C. Dvorak on Twitter
Follow Andrew Horowitz on Twitter
Warm Up
- Volatility is back
- Bitcoin mania
- Need a new CTP Stock!
- LSD - making an interesting comeback

Market Update
- NVDA had 2 down days!
- Markets still want to go higher - not matter what the data
- Yields move up with CPI
- Big rebound for NVDA - not letting it go down too much...

CPI Release
- Total CPI increased by 0.4% month-over-month, meeting expectations, while core CPI (excluding food and energy) also rose by 0.4% month-over-month (0.3%).
- On a year-over-year basis, total CPI was up 3.2%, compared to 3.1% in January, and core CPI increased by 3.8%, versus 3.9% in January.
- Excluding shelter, CPI rose by a more modest 1.8% year-over-year.
- Despite the headline disappointment for core CPI, the market seems optimistic about the future, anticipating a reduction in the isolated impact of the shelter index in the coming months due to an expected moderation in rent prices. (in other words, thinking the Fed's PCE will not be so hot next time and the Fed will still cut sometime this year)




CPI Report key takeaways:
- The food index showed no change month-over-month and increased by 2.2% year-over-year.
- The energy index rose by 2.3% month-over-month and declined by 1.9% year-over-year.
- Used cars and trucks saw a 0.5% increase month-over-month and a 1.8% decrease year-over-year.
- The apparel index was up 0.6% month-over-month and unchanged year-over-year.
- The all items index, excluding food, shelter, and energy, increased by 0.3% month-over-month and 2.2% year-over-year.
Inflation - YoY




Inflation - ACTUAL
Layoffs - Does not fit the narrative
- Layoff announcements in February hit their highest level for the month since the global financial crisis, according to outplacement firm Challenger, Gray & Christmas.
- The total of 84,638 planned cuts showed an increase of 3% from January and 9% from the same month a year ago, with technology and finance companies at the forefront.
- From a historical perspective, this was the worst February since 2009, which saw 186,350 announcements as the worst of the financial crisis was seemingly coming to an end.
- Here is where it gets interesting: The layoff numbers, however, are not feeding through to weekly jobless claims, suggesting that unemployment is short-lived and workers are able to find new positions.

Powell
- On one hand he stated that the Fed is watching and not ready yet to cut rates - data dependent
- A couple days later he indicated that interest rate cuts may not be too far off if inflation signals cooperate.
- In remarks to the Senate Banking Committee, the central bank leader didn't provide a precise timetable of when he sees easing happening, but noted that the day could be coming soon.

Mnuchin to the Rescue?
-NYCB had bad month - and got worse
- Lost 7% of deposits
- Bond rating cut
- Investment firm lead by Steve Mnuchin swooped in with a cool $1 billion rescue package
- Remember NYCD bought Signature Bank - obviously so much crap in that portfolio it helped poison NYCB

Oracle Earnings
- New ATH
- Reports Q3 (Feb) earnings of $1.41 per share, excluding non-recurring items, $0.03 better than the FactSet Consensus of $1.38; revenues rose 7.1% year/year to $13.28 bln vs the $13.29 bln FactSet Consensus.

- Q3 Total Remaining Performance Obligations up 29% to $80 billion.
- Q3 Cloud Revenue (IaaS plus SaaS) $5.1 billion, up 25% in USD, up 24% in constant currency.
- Q3 Cloud Infrastructure (IaaS) Revenue $1.8 billion, up 49% in both USD and constant currency.

All sorts of good stuff in this episode.

Some good laughs and fun throughout the year.

Thanks to Ryan Rediske for all the help in putting this together!





 
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